Eco Reflection

This week’s reflection -

This week’s discussion included the effect of externalities on market outcomes and an analysis of these effects, differentiating among horizontal, vertical, and conglomerate mergers, and analyzing the effect of government interventions, taxation, and regulations on economic behavior.

Objectives that were found to be comfortable is the effects of externalities on market outcomes. The text describes externalities as the effects of a decision on a third party that is not intended. (Colander, D. C. (2010). There are two types of externalities; positive and negative. Negative externalities cause damage to others and positive externalities benefit others. A negative externality can be when consumers spend, but there is no positive impact to the market. Positive externalities, such as education, can benefit the market. An example of a positive externality is my company purchasing another building in Oceanside. The purchase of a new building will have a positive impact to the community in terms of more jobs and taxes paid to the government.

Analyzing the effect of government interventions, taxation and regulations on economic behavior was somewhat easy to understand. An example to this would be taxation of cigarettes or marijuana. Everyone has a different opinion when it comes to these topics but in the end, the higher taxes on these types of products could have a positive benefit to society and hopefully deter some consumers from utilizing the products, due to higher costs.

A topic that was found challenging is the understanding and differentiating among horizontal, vertical and conglomerate mergers.

References

Colander, D. C. (2010). Economics (8th ed.). New York, NY: McGraw-Hill.